Bursa Malaysia Berhad recorded a Profit After Tax and Minority Interest (PATAMI) of RM46.9 million for the first quarter ended March 31 (1Q2019), a 26.5 per cent decrease from RM63.8 million reported in the previous corresponding quarter ended March 31 2018 (1Q2018).

The decrease in PATAMI is primarily due to lower operating revenue by 16.2 per cent to RM121.4 million from 1Q2018.

Total operating expenses in 1Q2019 which saw a marginal decrease by 1.4 per cent to RM62.0 million from RM62.9 million in 1Q2018 continue to be well managed despite an increase in developmental expense.

The marketing and development expenses increased mainly due to the higher activities carried out by the Securities and Derivatives Markets.

Efforts to attract greater and more diversified participants into the market included initiatives to promote financial literacy for more informed decision making in investing.

While 1Q2019 was a weak quarter for the Exchange, this was consistent with the prevailing domestic and global developments, which include concerns of slower economic growth, weaker corporate earnings and palm oil prices.

However, market sentiment is seen to be improving reflected by the positive momentum in monthly average daily trading value (ADV) and monthly average daily contracts (ADC) that have been trending upwards through the quarter under review.

“A bourse is a reflection of wider conditions, the first quarter of the year remained challenging on the back of weaker sentiment largely influenced by external concerns.

“These concerns are wide ranging, and are driving uncertainty in the global economy and the spillover of this impact is also affecting businesses of all sizes in our local economy.

“While the FTSE Bursa Malaysia KLCI Index weakened in the first quarter, it is important to note that the small and mid-cap indices continue to show a positive trend, with the FTSE Bursa Malaysia Small Cap Index and FTSE Bursa Malaysia Mid-70 Index recording a year-to-date (YTD) growth of 13 per cent and 9 per cent as at end-March,” said Bursa Malaysia chief executive officer, Datuk Muhamad Umar Swift.

For the quarter under review, Securities Market registered trading revenue of RM59.0 million compared to RM76.3 million in the previous corresponding quarter, down by 22.6 per cent as a result of lower ADV for Securities Market’s on-market trades in 1Q2019.

The total non-trading revenue decreased by 7.6 per cent to RM42.1 million in 1Q2019 from RM45.6 million in 1Q2018 mainly due to the decline in listing and issuer services revenue.

However, this was partly offset by higher market data revenue mainly due to higher number of subscribers.

Derivatives Market trading revenue decreased by 13.8 per cent to RM16.4 million in 1Q2019 from RM19.0 million in 1Q2018, mainly due to lower number of contracts traded for Crude Palm Oil Futures and FTSE Bursa Malaysia KLCI Futures, as well as higher market incentives incurred in 1Q2019.

ADC for the Derivatives Market saw a decrease of 12.3 per cent, with 47,359 contracts in 1Q2019 compared to 54,020 contracts in 1Q2018.

As for the Islamic Capital Market, Bursa Suq Al-Sila’ (BSAS) remained fairly stable, registering a trading revenue of RM3.9 million despite the growth in ADV by 39.6 per cent to RM31.6 billion in 1Q2019.

“Looking beyond general analysis, we believe that these temporary challenges are the impetus that can drive positive transformation amongst more agile participants across the broad economy.

“The fundamentals of the Malaysian economy are strong and robust, and we remain confident of the country’s resilient growth trajectory.

“The recent positive announcements such as the revival of the East Coast Rail Link and Bandar Malaysia projects will have a positive impact and act as a catalyst that will stimulate the broader market,” said Datuk Umar.

“Despite external concerns, we will continue to position the Exchange for long-term growth by improving operational efficiency, digitalising our services to provide better customer experience such as our upcoming CDS e-services and enhancing the breadth and depth of the capital market with the introduction of new products, thus ensuring we are well placed when market sentiment improves.

“For us at Bursa Malaysia, this dual focus on the near future as well as greater transformations to come are key components to deliver on our promise of Creating Opportunities, Growing Value,” he added.

Mercedes-Benz Malaysia (MBM) successfully delivered a total of 2,944 vehicles to customers in the first quarter of 2019 and continues to remain its position at the top premium automotive brand in Malaysia.

With the solid number of model launches, continuous enhanced customer services and experiences offered, MBM is looking forward to a challenging year ahead with its first-class customer experience as well as the introduction of an array of exciting new products to the market.

“We started the year with the launch of five new models in the first quarter of 2019.

“We will continue to enhance our brand experience with innovative mobility solutions, introduction of new products and engaging experiences through our customer services,” said MBM president and chief executive officer, Dr Claus Weidner

“At MBM, we place high importance in offering the right mix of product and services to our existing and new customers.

“Our customer-centric approach will continue to provide our customers with the best service and the best customer experience.

“This includes continue to honour our brand promise through the various formulated service packages to ensure that our customers enjoy ultimate peace of mind throughout the entire ownership life cycle of their vehicles,” added Dr. Weidner.

“We remained as the number one premium market leadership position with a total of 2,944 vehicles delivered to customers in the first quarter and a best-ever sales in March with 1,334 vehicles.

“This was a direct contribution from the exceptional financing offer coupled with a comprehensive service packages offered,” said vice president, Sales & Marketing, Mark Raine.

The first quarter of the same financial year also saw Mercedes-Benz Services Malaysia (MBSM) records a financing portfolio of over RM 2.7 billion with an increase of 0.3 billion of year-to-date growth.

MBSM financed four out five Mercedes-Benz vehicles sold and 50 per cent of them were insured by MBSM.

Over 40,000 vehicles were serviced in the first quarter of 2019, a 13 per cent increase compared to the previous year.

The positive growth volume of vehicles serviced is attributed to the extensive network of 35 dedicated dealerships nationwide.

“We will continue the momentum in the first quarter of 2019.

We are indeed looking to introduce more upcoming premium products and we will be sharing more information in due time,” said Dr Weidner on MBM’s outlook for the year ahead.

Yutaka Shoji, Japan’s foremost futures trading company listed on the JASDAQ Securities Exchange with over 62 years of experience in commodity futures and is also a registered member of the Tokyo Commodity Exchange, Osaka Dojima Commodity Exchange, Tokyo Financial Exchange and the Singapore Exchange.

Recognising the opportunity offered by domestic CPO products, the Tokyo-based player has spread its wings to local shores, having recently registered as a licensed derivatives brokerage firm with Securities Commission Malaysia.

Coupled with Malaysia’s open business climate and strong bilateral ties with Japan, these have been the driving factors underlying Yutaka Shoji’s decision to invest more than RM13 million in setting up a presence in the country.

In an industry that is worth RM140.1 billion, the commodities sector contributes close to 15% of the country’s export, with palm oil contributing RM77.8 billion or 55.6%.

“The CPO market in Malaysia has much potential, and has not been fully explored. We see ourselves taking a role in advancing the market, as we have the necessary skill sets in commodity futures trading to offer price stability for both local and global buyers.

“We are currently the only futures brokerage firm from Japan to have a presence in Malaysia, and we’re here to connect local producers to Japanese buyers and to open up the market to both groups of stakeholders,” said Tsuyoshi Morita, Managing Director of Yutaka Shoji Malaysia.

“Asia is the heartbeat of commodities trading. We have had a presence in Singapore for almost 30 years, specialising in rubber futures trading, and it is about time for Yutaka Shoji to come to Malaysia, with a specific focus on CPO futures as the market has strong growth prospects.

“We foresee demand from Japanese buyers comprising up to 50% of our initial business, given Japan’s need for CPO as part of its renewable energy policy.

“We also aim to attract local retail participants who would like to set up a trading account to benefit from the risk which producers and buyers seek to mitigate, while also leveraging on arbitrage opportunities, which will make up the other 50% of our targets,” he added.

At the official launch of Yutaka Shoji Malaysia were Primary Industries Minister Teresa Kok, Japanese Ambassador to Malaysia Dr Makio Miyagawa with other guests in attendance.

Malaysia’s first Exchange-Traded Funds (ETFs), namely ABF Bond Index Fund and FTSE Bursa Malaysia KLCI etf (FBM KLCI etf) have declared an income distribution of 4.65 sen and 2.80 sen per unit respectively for its financial year ended 31 December 2018 with AmInvest managing both ETFs.

ABF Malaysia’s income distribution of 4.65 sen per unit in December 2018 represents an income distribution yield (the rate of the return of the ETF based on income distribution) of 4.06 per cent, which was computed based on the ETF’s net asset value of RM1.1457 per unit as at 31 December 2018.

ABF Malaysia is the only bond ETF in the market and its portfolio consists of mainly Malaysian government bonds. It tracks the performance of Markit iBoxx®ABF Malaysia Bond Index.

FBM KLCI etf is designed to follow the performance of its benchmark index, FTSE Bursa Malaysia KLCI, which comprises Malaysia’s top 30 largest companies in terms of market capitalisation.

During its financial year, FBM KLCI etf declared a total income distribution of 3.30 sen per unit (inclusive of the above final income distribution of 2.80 sen and an interim income distribution of 0.50 sen declared on June 2018), which represents an income distribution yield of around 1.91 per cent

The yield was computed based on the ETF’s net asset value of RM1.7286 per unit as at 31 December 2018.

“Investing in ETFs is an easy and cost-effective way for investors to gain exposure and diversify their current investment portfolios, which can help reduce overall portfolio risk during times of market volatility,” said AmInvest chief executive officer, Goh Wee Peng.

“We laud the latest enhancements to the ETF framework by Bursa Malaysia Berhad such as the introduction of qualifying criteria for investors trading in leveraged and inverse ETFs, as well as, the expansion of the permitted short selling framework to allow the short-selling of new types of ETFs from the current equity-based ETFs.

“Improvements such as these will help drive growth and industry innovation, and thus create a more vibrant ETF ecosystem,” Wee Peng added.

AmInvest dominates the market as the largest ETF provider in the country with around RM1.42 billion worth of assets under management.

For the past three years, it has been recognised as Malaysia’s Best ETF Provider by The Asset based in Hong Kong

“We observed that a bullish environment is highly desirable for call warrant traders. With our ears to the ground and our eyes opened to the ever-changing market trends, this issuance will attract traders as the sensitive warrants flip prices quickly, they can enter and exit with speed and ease,” said Kenanga Investment Bank’s Head of Equity Derivatives, Philip Lim.

These 12 call warrants mark the second issuance in 2019 since KIBB’s Live Matrix launch – a trading tool which enables investors to view the live feed from Kenanga’s market making system, giving them easy access to real-time market data and flexibility to trade on-the-go.

KIBB aims to build a savvy and agile warrants trading community in Malaysia by equipping them with the right tools and information through its monthly talks to enhance financial literacy, including warrants trading.

RHB Bank Berhad successfully launched and priced a USD300.0 million in nominal value, 5-year senior unsecured notes (Senior Notes), marking the third issuance of its USD5.0 billion Euro Medium Term Note (EMTN) Programme, which was established on September 23, 2014 and the first USD public benchmark issuance by a Malaysian financial institution since April 2017.

The orderbook at the final price guidance stood at over USD1.8 billion, implying an oversubscription level of over 6.0 times from 114 accounts.

The strong demand allowed RHB Bank to tighten guidance to 128 bps over 5-year US Treasury at a yield of 3.766% per annum, representing the tightest credit spread for Southeast Asia/South Asia Issuance to-date in 2019.

By geographical distribution, Asian investors were allocated 95% and European investors 5%. In terms of investors’ type, fund managers and insurance companies were allocated 67% of the issue while banks were allocated 29% and the remaining 4% were allocated to private banks.

The Senior Notes are rated A3 by Moody’s Investors Service Inc. The issuance of the Senior Notes is expected to be completed by 19 February 2019 and the Senior Notes will be listed on the Singapore Exchange Securities Trading Limited and Labuan International Financial Exchange Inc.

“We are pleased with the strong interest in our USD300 mil bond issue, which is able to attract interest from a diverse investor base across Asia and Europe.

“The pricing level reflects the strong confidence from the global investment community in RHB Bank as well as the overall investor sentiment towards Malaysia”, said RHB Banking Group managing director, Datuk Khairussaleh Ramli.The net proceeds from the issuance of the Senior Notes will be utilised by RHB Bank for general working capital purposes.

RHB Investment Bank Berhad, Credit Suisse (Singapore) Limited and The Hongkong and Shanghai Banking Corporation Limited are the Joint Lead Managers for the Senior Notes issuance.

The Securities Commission Malaysia (SC) chairman, Datuk Syed Zaid Albar, has been elected the vice chair of the International Organisation of Securities Commissions (IOSCO) Growth and Emerging Markets (GEM) Committee.

The IOSCO GEM Committee’s priorities are focused, among others, on policy and development work affecting emerging markets; risks and vulnerabilities assessments; and regulatory capacity building.

It is the largest Committee within IOSCO, representing close to 80 per cent of the IOSCO membership, including 11 of the G20 members.

As vice chair of the GEM Committee, Datuk Syed will be a member of the IOSCO Board, the governing and standard-setting body of IOSCO.

He also co-chairs the IOSCO GEM Committee Working Group on Sustainability in Emerging Markets.

The Securities Commission Malaysia (SC) amended its Guidelines on Recognised Markets to introduce new requirements for electronic platforms that facilitate the trading of digital assets.

Under the revised guidelines, any person who is interested in operating a digital asset platform is required to apply to the SC to be registered as a recognised market operator.

“The new framework is part of the SC’s efforts to promote innovation while ensuring investor protection in the trading of digital assets,” said SC chairman, Datuk Syed Zaid Albar .

He added that while there is a framework to facilitate the trading of digital assets, investors are reminded to be mindful of the risks when dealing in digital assets such as sudden price fluctuations and liquidity risks.

The amended guidelines follows the coming into force of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 on 15 January.

Any person who is interested to operate a digital asset platform, including those operating within the current transitional period, have to submit an application to the SC by 1 March.

TA Investment Management Bhd (TAIM) announced the launch of its TA Rainbow Income Fund , a fixed income close-ended fund investing in fixed income instruments and options /structured warrants to provide potential annual returns.

The Fund aims to provide income whilst preserving capital on maturity date.

“The new Fund is an exclusive partnership with OCBC Bank and will be exclusively distributed by OCBC Bank.

“The Fund is specifically designed to cater to current volatile and uncertain market as during uncertain market direction, diversified investment is one of the most common strategies used.

“However, the most common strategy performance will only be average of the portfolio’s underlying assets and on top of that, the return of the best performance underlying assets will be dragged down by the lower performing underlying assets in the portfolio,” said TAIM·chief executive officer, Wong Mien.

However, with TA Rainbow Income Fund, the key feature is dynamic performance-based allocation strategy.

The Fund is linked to the performance of the three award winning underlying assets allocated in the Fund. Based on actual performance of the underlying assets, the unique strategy will automatically allocate higher weightage (per cent) to the best performing underlying assets.

That is, the Fund will be allocating 45 per cent weightage to the best performing underlying assets, followed by 30 per cent weightage to the second-best performing underlying assets and the remaining 25 per cent weightage to the third-best performing underlying assets.

TAIM foresee that this strategy will enhance the total return of the diversified portfolio allocation and will far outweigh the equal weightage’s average return.

To generate good returns for the Fund, TAIM have selected a diversified portfolio of three award winning underlying assets with absolute return and mixed assets strategy to ease the uncertain and volatile market.

The Fund also provides a potential annual return to investors unlike in time of market volatility, with the normal investment strategy, the returns may subject to negative return, it is otherwise for this Fund.

With this Fund, investor will be at ease, there is no negative return for this Fund as investor’s capital will be preserved as long as they keep invested for three years until maturity.

In summary, TA Rainbow Income Fund comprises of three award winning underlying assets and has a unique dynamic performance-based allocation strategy which will help investors navigate through the volatile market by enhancing their diversified portfolio annual returns while preserving their capital at the end of three years upon maturity.

The Fund seeks to achieve its investment objective by investing at least 90 per cent of its Net Asset Value (“NAV”) in fixed income instruments which aim to repay the initial investment of investors at maturity date (including sales charges).

Up to 10 per cent of the Fund’s NAV will be invested in options / structured warrants linked to the performance of the three award winning underlying assets to generate return.

The 45-day initial offer period will start from January 23 to March 8.

The Securities Commission Malaysia (SC) has released a media statement on the implementation of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 on January 15,.

SC has received numerous queries on the implementation of the Order and has engaged with existing digital asset platform operators.

Arrangements have been put in place to facilitate the operations of these platforms for a transitional period until March 1, subject to them fulfilling the conditions specified by the SC.

During this period, these platform operators will not be permitted to accept new investors and will only be allowed to facilitate the withdrawal or transfer of client assets with the written instruction of the investor.

Existing platform operators who failed to or did not attend the engagement with the SC on January 17 are advised to contact the SC immediately and not later than January 25, failing which they shall be deemed to be operating a market in breach of the securities laws.

Once the relevant guidelines have been issued, existing platform operators will be required to apply to the SC for authorisation if they intend to operate beyond the transitional period.

Prospective operators can also apply to the SC for authorisation once the guidelines are issued.

The SC will evaluate all applications and will only authorise market operators that fulfil the relevant requirements.

With regard to initial coin offerings (ICOs), no person shall conduct an ICO without the prior authorisation of the SC.

In this regard, the guidelines for ICOs will be issued by the end of Q1 2019.

In the meantime, ongoing ICOs should cease all activities and return all monies or digital assets collected from investors.